Many in the marketing agency business have heard the trope that “Clients don’t want to pay for strategy.”
But is that a truism or a superstition?
The agency world wanted to know, so “strategy” was a key topic (one of many) in the 2022 Agency Audit survey conducted by an independent research firm.
Sure enough, 20 percent of agency leaders who responded to the survey strongly agreed that clients do not want to pay for strategy. But a whopping 80 percent did not strongly agree.
Now, going back to the “trope”—even though a perception might be anecdotally widespread, the reality, in this case, was not. That’s why we play the game (and do research). Otherwise we wouldn’t know the score.
In the inaugural launch of the annually slated Agency Audit marketing survey, the 343 respondents in the fall of 2021 were agency owners and leaders, with 90 percent of them located in the U.S., but 20 other countries were also represented. The survey was conducted by Audience Audit, an independent research firm based in Arizona, serving small- to mid-size marketing agencies.
The Broader Study
All agencies are different in some way but may touch a host of common hot buttons. So the researchers did a deep dive into those—uncovering the related attitudes, service offerings or marketplace focus that agencies have toward:
- Niche Positioning
- Thought Leadership
- Client Retention (and Defection)
- Talent Acquisition (and Retention)
- (Not an all-inclusive list)
Like all great research, results were eye-opening. We’ve shared many of them through White Label IQ content and will continue to do so.
— Sir Arthur Conan Doyle, characterizing Sherlock Holmes in “A Scandal in Bohemia”
It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories instead of theories to suit fact.
The Ability to Position
Research provides clarity. Agencies develop a deeper understanding of themselves, their clients and their clients’ audiences through research.
According to the Harvard Business School, an agency can then position itself and formulate a value proposition that is attractive. A niche in the marketplace where it can serve as a thought leader, building a sustainable competitive advantage. And that process is deeply anchored in data and analysis.
Who are we targeting; who are we not targeting? What boundaries are we identifying; how do those align with the clients we want to serve?
The niche positioning that arises from that is well-defined, not just targeting a broad industry such as “vehicles”. But it could be “manufacturers of recreational equipment sold through dealerships”, for example. Or, instead of “financial services”, narrow it down to “lending through community banks”. Or, a focus on “independently owned dental offices” versus something expansive like “health care”.
It’s a specific niche position for the agency. And that expertise helps it strengthen the client’s marketplace position in the same way—with both parties standing out from the competition.
It’s strategic. It’s thought leadership. It’s a niche.
Instead of being constantly distracted by commoditized production services that anyone can offer, the agency can now focus on their unique expertise instead—providing higher-quality products and services than ever before. It has leveraged research and subject matter expertise from its industry peers. And when it needs to fill gaps in some of the more routine service offerings, it can partner with others.
A series of attitudinal questions and statements in the Agency Audit survey defined segments of responders. In the initial example at the top of this article, those who did not think clients would pay for strategy were unlike all the others. For them, it was time to turn the tables, so they were identified as Change Seekers.
Others who were not seeking change were known as Thought Leaders (strong niche position) and Loyalty Builders (strong client retention). Those two segments led the pack in many key indicators. However, all five of the resulting segments are further defined in our related article, Agency Audit: Survey Segmentation.
The Value of Partnership
Industry peers are supportive of the Agency Audit survey initiative. And hundreds respond to it. Through this spirit of partnership, the insights of all are shared. In this year’s edition, the number of respondents provided an overall margin of error of +/- 5.3 percent at a 95 percent confidence level. Which means that 95 percent of the time, repeating the study would generate results within 5.3 percentage points.